STRATEGIC PARTNERS
Falling transaction levels due to ATM proliferation is forcing ATM owners and retail establishments to team up to increase transaction volume. by Tom Harper, Publisher
March 7, 2002
A million-dollar question plagues hundreds of supermarkets, c-stores, instore banks and private ATM owners:
"How can we entice customers to withdraw money more often from the ATM and spend it in the store?"
The answer never seems to be the same for every situation. With so many ATMs sometimes in the same shopping center, competition for transaction traffic tops the list of concerns for ATM owners, especially as we approach the deployment saturation point.
So what are today's cutting-edge retailers doing to increase foot traffic using their instore ATM? How are ATM owners drawing more cardholders to use the instore machine?
Is there really an answer to the million-dollar question?
ATMs Invade The Retail Scene
"Value-added" is a term used in just about every major industry known to man. The basic concept is differentiation in a uniform, mature market. When consumers perceive they're getting more for their money they tend to make a confident purchase.
Throughout the eighties many grocers embraced this philosophy and tried to offer as much value as they could cram into their stores. After much trial and error, instore banking emerged as a successful customer convenience and offered the store an instant revenue stream.
Now grocers and their retail brethren need to train an eye on how other industries- including private investors--are reacting to the explosive consumer demand for automated teller machines.
ATMs have established themselves in many locations once considered ridiculous. Casinos, malls, cruise ships, department stores, airports, flea markets, stadiums--any place with significant foot traffic is now fertile ground for automated teller machines. New mobile ATMs travel the country dispensing hundreds of thousands of dollars to cash-hungry consumers at major events.
In response to the wide consumer acceptance of automated teller machines, grocers and other major retailers are buying ATM machines in record numbers. Not only do they offer customers a welcome convenience, but retailers earn surcharge revenue that quickly pays for the machine itself.
But putting an ATM on the supermarket or c-store floor is only the beginning.
How An ATM Can Increase Retail Sales
If you're a retailer with an instore bank you know the value the bank and its ATM offer you and your customers: ready cash to be spent in your store. For many consumers, hitting your ATM is the ritualistic first step in a regular shopping routine.
But now that you and every other retailer out there offer (or plan to offer) the same cash convenience, some forward-thinking chains are raising the bar by capitalizing on another profit opportunity. Rather than investing in more advertising that may have questionable effects on sales, they're creating new profit centers through their ATMs at very little cost per store.
There are many ways to make money from ATMs (the surcharge is the most popular albeit the least favored with consumers). Banks are experts at it. And now major retailers and private owners are catching on.
The latest trend is an often-overlooked ATM capability any store and ATM owner can jointly profit from: couponing.
Creating A Profitable ATM Coupon Program
Consider a couple questions.
• Would you like to offer value back to every customer who forks over the surcharge at your instore ATM?
• Does it make sense to pull ATM-only customers deeper into the store to spend some of the cash they just withdrew?
ATM receipt coupons not only pay back a customer's surcharge with product savings, they tie in the ATM and the store in a truly symbiotic relationship. As transaction levels increase, more coupons are dispensed and consequently more are redeemed, resulting in increased trackable store sales of specific products.
Since banks and private ATM owners welcome any extra attention drawn to their ATMs, store owners can create a true win/win situation and even solicit their help in paying coupon printing costs.
Most successful instore promotions include posters or other signage that complement the ATM coupons. Giveaways, sweepstakes and many other types of promotions can boost profits even moýI0
